As businesses continue to face unprecedented challenges navigating the global pandemic and depressed consumer spending and demand, companies are looking for cost-saving measures across the board to stay afloat and to maintain corporate profits. Many businesses have shifted to adding arbitration agreements with binding class action waivers to the sale of goods and use of services to consumers to flatten company annual litigation defense spending. These agreements require consumers to bring any claim arising out of their purchase or use of a product or service in arbitration rather than in court, and prevent consumers from bringing such claims as part of a class or consolidated action.

The first part of this article, published in the January issue of The Computer & Internet Lawyer, discussed why an arbitration clause can be a powerful tool in a company's litigation defense arsenal; the enforceability of arbitration agreements under the Federal Arbitration Act; the two most common types of web-based contracts (a "clickwrap" or "clickthrough" agreement and a "browsewrap" agreement); and best practices for drafting those web-based contracts; and elements that attorneys defending a company's arbitration agreement in court should incorporate into any motion to compel arbitration.

The second and third parts of this article (published in the February and March issues of The Computer & Internet Lawyer), surveyed recent decisions (in chronological order based on date of publication) over the past year or so across all jurisdictions involving the enforceability of consumer electronic acceptance of arbitration agreements. This part continues the survey.

The summaries below are focused principally on the question of contract formation, that is, whether the consumer had notice of the arbitration agreement and manifested their agreement to it, and the arguments plaintiffs have invoked in an effort to evade a finding of mutual assent to arbitrate any disputes. The summaries include imagery of the corporate website and app presentations of the arbitration agreements at issue in each case, and explain how those agreements fared when tested in court. The case of Sollinger v. SmileDirectClub, LLC illustrates a strong clickwrap sign-up agreement that required users to affirmatively check a box next to text stating "I agree to SmileDirectClub's Informed Consent and Terms & SmilePay Conditions," with the phrases "Informed Consent," "Terms," and "SmilePay Conditions" all presented as turquoise, underlined hyperlinks. The "Informed Consent" hyperlink, when clicked on, would present users with the arbitration agreement. And a user could not complete the sign-up process without checking the box and then tapping on a large purple "FINISH MY ACCOUNT" button.

The advertisement at issue in Soliman v. Subway Franchise Advertising Fund Trust Ltd., on the other hand, was found to be infected with numerous deficiencies. There, the court found that a user lacked reasonably conspicuous notice of the arbitration agreement because Subway's notice of additional terms and conditions was neither underlined nor hyperlinked and "was sandwiched (so to speak) between roughly 100 words of small black text compared to which it was unimpressive, was tucked away at the bottom corner of the advertisement relatively distant from the offer, and contained no express language explaining that by accepting the offer, a consumer was agreeing to be bound by the terms." And the cases of Theodore v. Uber Technologies, Inc. and Arena v. Intuit Inc., for instance, illustrate the perils of designing agreements without adhering to certain key features credited by courts as strengthening inquiry notice, such as failing to underline the hyperlinked terms on the screen, presenting too many hyperlinked phrases on the same page, and not requiring an affirmative acknowledgment to be bound with a check box. While the defendant in Arena ultimately prevailed on appeal in the U.S. Court of Appeals for the Ninth Circuit, that additional expense and risk to the company could have been avoided had it incorporated some of those features into its agreement.

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